AFS Securities

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

The amortized cost and fair value of AFS securities, with gross unrealized gains and losses, are as follows at:


	September 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury	$	231,318	$	—	$	22,136	$	209,182
States and political subdivisions	97,042		350		7,619		89,773
Auction rate money market preferred	3,200		—		630		2,570
Mortgage-backed securities	36,927		—		4,004		32,923
Collateralized mortgage obligations	191,187		—		15,557		175,630
Corporate	8,150		—		1,331		6,819
Total	$	567,824	$	350	$	51,277	$	516,897


	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Treasury	$	231,622	$	—	$	22,921	$	208,701
States and political subdivisions	122,023		392		4,903		117,512
Auction rate money market preferred	3,200		—		858		2,342
Mortgage-backed securities	42,309		—		3,239		39,070
Collateralized mortgage obligations	218,301		—		12,573		205,728
Corporate	8,150		—		1,022		7,128
Total	$	625,605	$	392	$	45,516	$	580,481

The amortized cost and fair value of AFS securities by contractual maturity at September 30, 2023 are as follows:


	Maturing								Securities with Variable Monthly Payments or Noncontractual Maturities
	Due in One Year or Less		After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years				Total
U.S. Treasury	$	—	$	231,318	$	—	$	—	$	—	$	231,318
States and political subdivisions	11,998		31,826		20,807		32,411		—		97,042
Auction rate money market preferred	—		—		—		—		3,200		3,200
Mortgage-backed securities	—		—		—		—		36,927		36,927
Collateralized mortgage obligations	—		—		—		—		191,187		191,187
Corporate	—		—		8,150		—		—		8,150
Total amortized cost	$	11,998	$	263,144	$	28,957	$	32,411	$	231,314	$	567,824
Fair value	$	11,945	$	240,395	$	25,832	$	27,602	$	211,123	$	516,897

Expected maturities for government sponsored enterprises and states and political subdivisions may differ from contractual maturities because issuers may have the right to call or prepay obligations.

As the auction rate money market preferred investments have continual call dates, they are not reported by a specific maturity group. Because of their variable monthly payments, mortgage-backed securities and collateralized mortgage obligations are not reported by a specific maturity group. Approximately $148,000 of the amortized cost of the collateralized mortgage portfolio consist of agency commercial mortgage-backed securities with defined maturity dates of less than ten years.

A summary of the sales activity of AFS securities is as follows for the:


	Three Months Ended September 30				Nine Months Ended September 30
	2023		2022		2023		2022
Proceeds from sales of AFS securities	$	—	$	—	$	18,089	$	—
Realized gains (losses)	$	—	$	—	$	67	$	—
Applicable income tax expense (benefit)	$	—	$	—	$	14	$	—

The following information pertains to AFS securities with gross unrealized losses at September 30, 2023 and December 31, 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position.


	September 30, 2023
	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
U.S. Treasury	$	—	$	—	$	22,136	$	209,182	$	22,136
States and political subdivisions	962		24,474		6,657		53,180		7,619
Auction rate money market preferred	—		—		630		2,570		630
Mortgage-backed securities	1		38		4,003		32,885		4,004
Collateralized mortgage obligations	294		4,362		15,263		171,268		15,557
Corporate	—		—		1,331		6,819		1,331
Total	$	1,257	$	28,874	$	50,020	$	475,904	$	51,277
Number of securities in an unrealized loss position:			67				400		467


	December 31, 2022
	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
U.S. Treasury	$	1,388	$	18,331	$	21,533	$	190,370	$	22,921
States and political subdivisions	2,389		48,083		2,514		40,667		4,903
Auction rate money market preferred	—		—		858		2,342		858
Mortgage-backed securities	3,239		39,070		—		—		3,239
Collateralized mortgage obligations	12,408		201,315		165		4,411		12,573
Corporate	—		—		1,022		7,128		1,022
Total	$	19,424	$	306,799	$	26,092	$	244,918	$	45,516
Number of securities in an unrealized loss position:			178				266		444

As of September 30, 2023, no allowance for credit losses has been recognized on AFS securities in an unrealized loss position, as management does not believe any of the securities are impaired due to reasons of credit quality. This is based on our analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors related to our AFS securities and consideration of our historical credit loss experience and internal forecasts. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, management does not have the intent to sell any of the securities classified as AFS in the table above, and believes it is more likely than not that we will not have to sell any such securities before a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their respective maturity date or repricing date, or if the market yields for such investments decline.